Auditing Based on Reason to Believe

PURPOSE: Sections 447.500–447.595, RSMo comprise the Missouri Uniform Disposition of Unclaimed Property Act. This rule outlines procedures for requesting an examination of a holder’s records based on the treasurer’s “reason to believe” that the holder has not complied with the provisions of the Unclaimed Property Act. (1) Pursuant to section 447.572 of the Missouri Uniform Disposition of Unclaimed Property Act (the Act), the treasurer shall have reason to believe that holder has failed to report property in accordance with the Act and may examine the records of the holder, anytime one (1) of the following conditions exist: (A) A holder has not submitted a report to the Unclaimed Property Division for two (2) successive calendar years and the kind of business is such that typically unclaimed property would be reportable on an annual basis; (B) The treasurer receives information that may indicate any of the following: 1. The holder adjusts its asset accounts and financial statements by writing off property such as check or credit balances that could be deemed unclaimed property under the Act; or 2. The holder does not follow generally accepted accounting principles or the Act with regard to unidentified remittances or the establishment of unclaimed property liability accounts; or 3. The holder does not follow generally accepted accounting principles or the Act with regard to the disposition of unidentified credits; or 4. The holder does not retain records for eight (8) years prior to the reporting property, which could be deemed, abandoned under the Act; (C) The holder’s records preclude the treasurer from determining the disposition of property which could be deemed abandoned under the Act; (D) The treasurer’s office is notified in writing, or verbally with written confirmation, that a holder appears to not be in compliance with the Act; (E) The total unclaimed property remitted by a holder is below the average remittance for other holders in the same industry and has assets of similar size to the holder; (F) A holder does not report all types of unclaimed assets they may be holding; (G) A holder is discovered as a subsidiary or affiliate of another holder which has been or is being examined; (H) A holder is discovered as a principal or holding company of another holder which has been or is being examined; (I) An unclaimed property audit of the holder is initiated by another jurisdiction; or (J) Any other reasons which give the treasurer “reason to believe” that a holder has not complied with the provisions of sections 447.500–447.595, RSMo. (2) Estimation Techniques. (A) If a holder has failed to retain adequate records sufficient to conduct and conclude an audit, the unclaimed Property Division may use estimation techniques that conform to either generally accepted auditing standards or generally accepted accounting principles to determine the amount of unclaimed property. (B) Except in cases where a holder is the subject of a multiple state audit, the estimation techniques applied by the treasurer will be limited to the most current reportable abandonment period. (C) Within fifteen (15) days of the receipt of the final audit report, a holder may request a hearing to contest the use or validity of estimation techniques. The examination shall become final upon the failure of the holder to request a hearing as provided in this section. If a hearing is held, the treasurer shall issue an order approving or disapproving the use of or validity of the estimation techniques. The order shall be a final order under the Administrative Review Law. However, a holder may contest the estimation techniques used by the treasurer in an appeal de novo to a circuit court of competent jurisdiction. AUTHORITY: sections 447.505, 447.520, 447.539, 447.543, 447.545 and 447.558, RSMo Supp. 1998 and 447.547, 447.562, 447.579 and 447.587, RSMo 1994.* Original rule filed April 15, 1999, effective Sept. 30, 1999. *Original authority 447.505, RSMo 1984, amended 1989, 1994, 1998; 447.520, RSMo 1984, amended 1998; 447.539, RSMo 1984, amended 1989, 1993, 1994, 1998; 447.543, RSMo 1984, amended 1986, 1989, 1993, 1994, 1998; 447.545, RSMo 1984, amended 1993, 1994, 1998; 447.547, RSMo 1984, amended 1989, 1990, 1993, 1994; 447.558, RSMo 1984, amended 1986, 1993, 1994, 1998; 447.562, RSMo 1984, amended 1989, 1993, 1994; 447.579, RSMo 1984, amended 1993, 1994; and 447.587, RSMo 1989, amended 1994.